Here's a closing summary.

In an unexpected move, almost 100,000 people left the ranks of the unemployed in the three months to October, and the claimant count fell by 36,500 in November. The full report is online here.

The total number of people in work hit 30 million for the first time. The proportion of public sector workers in the economy hit a record low (since 1999).

The news was hailed by the government as proof that its economic plan is working, but the opposition pointed out that the cost of living crisis continues, with more part-time workers keen to work full time than ever before. There was a clash over the stats in the Commons.

Average wages rose by just 0.9% in the quarter, meaning pay packets actually shrank by 1.3% in real terms once inflation is factored in.

Back to the eurozone briefly -- Nina Schick of the Open Europe thinktank has analysed Angela Merkel's speech to the Bundestag this morning, ahead of a meeting of EU leaders tomorrow.

She explains that Merkel told MPs that Europe needs banking union (but a more 'watered down' version than other countries), tough new contracts to ensure other countries stick to the rules, and a new treaty to bind it all together.

As Nina puts it:

Translation: if you want us to underwrite the euro, we need 'see-you-in-court' style supervisory powers, firmly grounded in law. That means, EU treaty change.

Former Irish bank executives charged with conspiracy to defraud

Denis Casey, one of three former top bankers who have been charged with conspiracy to defraud linked to €7.2bn of deposit transfers allegedly made to prop up Anglo Irish Bank's books, leaving the Criminal Courts of Justice in Dublin. Photograph: Niall Carson/PA

Over in the Criminal Courts of Justice in Dublin, three former senior bankers have been charged with conspiracy to defraud in the run-up to the country's banking crisis.

The trio includes the ex-chief executive of one of the country's largest lenders.

Reuters has the details:

Former CEO of Irish Life and Permanent, Denis Casey, the lender's former finance director Peter Fitzpatrick and former head of treasury at Anglo Irish Bank, John Bowe, were granted bail by Dublin's district court and are due to appear again next March.

All three replied "no" when the charges were put to them by police earlier on Wednesday, the court heard.

They will be able to lodge an official plea ahead of their trial.No-one has so far been jailed for any part in the country's banking crisis that began in 2008 and eventually cost taxpayers more than €60bn, or about two-fifths of national output.

The charges came ahead of the opening of a trial next year of three other senior executives at Anglo Irish Bank, which was nationalised in early 2009.

A representative of the Director of Public Prosecutions told the court on Wednesday there was "no factual connection" between the two cases.

All three men are accused of conspiracy to defraud between March and September 2008, that they conspired with each other to transfer 7.2 billion euros ($9.9 billion) between Anglo, Irish Life and Permanent and its Irish Life Assurance subsidiary, Dublin's district court heard.

Irish Life & Permanent has said it had deposited between 6 billion euros and 7 billion with Anglo in September 2008 to provide "exceptional support" at a time when the world's financial sector was hit badly by the collapse of Lehman Brothers.Irish Life and Permanent was effectively nationalised in 2011.

Bowe faces a second charge of false accounting in December 2008, under the Theft and Fraud Offences Act, the court heard.

John Bowe leaving the Criminal Courts of Justice in Dublin. Photograph: Niall Carson/PA

I appeal to #EU finance ministers to reach agreement on the #Single Resolution Mechanism today. It's feasible with a bit of festive spirit.

Or a slug of mulled wine, perhaps?

A Single Resolution Mechanism is a key step towards banking union. It would ideally include one system for Europe's banks, one authority to decide when a bank had failed, and one fund to pay for the clean-up .

Vitor Constâncio, the European Central Bank’s vice-president argued [the deal] failed to provide any emergency funding during the 10-year “transition period” before a new €55bn resolution fund is fully in place, in 2025.

“You should flesh out this possibility of the fund borrowing in the markets, to have bridge financing to complete a resolution process, with the proper strength of guarantees to make that process very quick and as cheap as possible,” Mr Constâncio said at the opening of Wednesday’s deliberations.

The Bank's governor, Mark Carney, had the perfect opportunity to comment on this good news when he appeared in public to announce new the move to new plastic bank notes. So did Carney say he was pleased that more people were finding work? He did not. Did he joke that unemployment was on course to hit the 7% mark before the new polymer notes are introduced in 2016. He did not.

In fact, the governor declined to answer questions about unemployment at all. He was there to talk about bank notes and that was it.

The reticence on the part of the governor is not perhaps as surprising as it seems. Getting economic forecasts wrong is becoming an embarrassing habit for the Bank. It failed to spot that Britain was in recession in 2008, was taken unawares by the flat-lining of 2011 and 2012, and has now under-estimated the strength of the pick-up.

Using unemployment as the basis for forward guidance on interest rates was always going to be problematical. The jobless rate does not move in the smooth, linear way assumed by the Bank: it tends to move up and down quickly depending on the state of the economy. Clearly, the economy now has a real head of steam behind it: it is unlikely but not totally out of the question that unemployment could hit 7% by the end of 2013.

Interest rate hike coming sooner than expected?

The pound remains high this lunchtime, up more than one cent against the US dollar at $1.636.

Expectations are growing that Britain's first interest rate rise since the crisis will come sooner than Bank of England governor Mark Carney has indicated, given today's strong jobs data.

Robert Wood of Berenberg Bank reckons that says the jobless rate could fall from today's 7.4% to 7% (the threshold for a possible rate rise) in 2014 -- not the third quarter of 2015 as the Bank expected.

Wood writes:

A huge jobs gain, chunky fall in the unemployment rate and another big fall in jobless claims signals a strong recovery is underway and raises the risk of an earlier rate hike than the BoE have indicated.

These figures pose risks to our forecast that unemployment will not hit 7% until Q2 2015 and that the first rate hike will come in Q3 2015. At this rate, it is not impossible that the threshold will be reached sometime next year. That being said, wage growth remains very subdued.

After a public consultation in which 87% of the 13,000 respondents backed the new-style currency, the Bank said it would introduce "polymer" notes, as it prefers to call them, in two years' time, starting with the new £5 note featuring Winston Churchill in 2016 and the Jane Austen £10 a year later.

Speaking at a press conference in the Bank's Threadneedle Street headquarters, Carney said: "Our polymer notes will combine the best of progress and tradition. They will be more secure from counterfeiting and more resistant to damage while celebrating the history and tradition that is important both to the Bank and the nation as a whole."

The Bank is also opening up the process of choosing famous faces for future bank notes (a response to the row over the lack of a single female face (her Majesty aside) on bank notes, until Jane Austen's £10 arrives).

A new advisory committee, with a majority of independent members, will now suggest a theme – such as scientific achievement. The public will be invited to suggest specific figures for inclusion. However, democracy only goes so far -- the governor will retain the final decision over which person is featured.

For starters, my colleague Alex Hern has nailed the story of bitcoin's tumble today:

The price of bitcoin has plummeted following an announcement from China's largest bitcoin exchange that it would no longer be accepting new yuan deposits.

BTC China said that due to action by a third-party payment provider, YeePay, it could no longer accept deposits in the Chinese currency, although it would still be able to process withdrawals. BTC's chief executive, Bobby Lee, said that YeePay gave notice on Wednesday morning Shanghai time that it would no longer provide services.

Lee blamed government regulation for the decision. China's central bank warned in early December that bitcoin was not legally protected and had no "real meaning", and barred financial institutions from using the currency.

On Tuesday, the central bank extended that ban to payment companies like YeePay, and gave them until Chinese New Year, which begins on 31 January, to comply.

At publication time, the value of one bitcoin on BTC China stands at ¥2,630 (£266.02), down from a high of ¥7,395 (£741.70) in late November. Bitcoin has dropped against other currencies in the same period, falling from £750 to £300 in the UK and from $1242 to $480 in the US.

Leaders clash over jobs data

PMQs December 18 Photograph: /Sky News

Over in Parliament, Ed Miliband has welcomed today's unemployment data - but pointed out that there are more part-time workers than ever before who'd rather have a full time job (as reported at 11.18am).

The prime minister says that today's data shows an "encouraging picture", with 99,000 fewer people unemployed in the three months to October, and the claimant count down 36,700 in November.

We can now say that 1.2 million new jobs have been created since the last election, David Cameron adds. The government's plan is working.

But Miliband points out that real wages have shrunk over the last year, and many people are fighting to hold down insecure jobs.

Miliband says Cameron did not answer the question. It is good the economy is creating more job. But too many are part-time or insecure. Is it a worry that average wages are £364 lower than last year?

Cameron says 70% of new jobs are full-time jobs. But there is more to do. It is all very well standing up at the despatch box, but Miliband said there would be 1m fewer jobs. We are waiting for him to correct the record. The only way to get more money in people's pockets is to keep on with the economic plan. What's his?

They're now trading blows over energy bills, childcare costs, tax.... Cameron saying his economic plan is working, while Miliband is pointing to the cost of living crisis.

QinetiQ chief: Britain still faces a youth jobless crisis

With almost a million young adults out of work, how do we solve the youth unemployment crisis?

Leo Quinn, CEO of defence and security firm QinetiQ, says industry needs to take the lead by hiring more apprentices and graduates and giving them the skills needed.

He's a founding member of The 5% Club, set up to get bosses to tackle this issue .

Quinn said:

Angela Merkel said recently youth unemployment is the biggest crisis facing Europe. Today’s figures show that this remains stubbornly the case here in the UK.

While total unemployment is falling, youth unemployment in this country has remained at worrying levels of around one million.

This represents the potential loss of an entire generation to both our society and our economy. We urge industry to step up to the plate and commit to recruiting more young people, including apprentices and graduates, in their organisations.

Government can only do so much from the supply side.

At 20.5%, Britain's youth unemployment rate is a little better than the eurozone average of 24.4%.

Unemployment: more reaction

Industry body, the CBI, says that the economic growth seen earlier this year is now feeding into the labout market:

Neil Carberry, CBI Director of Employment and Skills, said:

The stronger economic growth we have seen recently seems to be increasing the speed of job creation. With employment rising in almost all regions, led by full-time jobs and across most sectors, real progress is being made.

Our own employment survey shows this positive trend looks set to continue, with more than half of firms expecting to create new jobs next year, including more graduate and apprenticeship opportunities.

But other experts are pointing to falling real wages as the main black cloud in today's jobs data:

Today’s jobs statistics are resounding good news – it is encouraging to see the employment rate increasing, unemployment falling, and inactivity at its lowest level since 1991.

Once again, however, the positive story on jobs is not matched by good news on pay. This week’s announcement of a fall in inflation will ease the pressure on pay packets to a degree, but wage growth itself still remains historically weak. Until that picks up, analysts are right to worry about the sustainability of the recovery—with pressure on household incomes from other sources, consumer spending rests heavily on a return to solid wage growth.

Unemployment falling will be welcome relief to many, but the underlying trends point to a growing part-time, low wage economy where the recovery is passing ordinary people by.

Behind the headlines are hardworking people struggling to find a decent week’s work and make ends meet as the world of work becomes more insecure and inflation continues to outstrip wages.

Unemployment may be falling, but Cameron and Osborne’s cost of living crisis is deepening and forcing working people to food banks this Christmas. The government needs to boost the minimum wage and invest to create a high skilled economy where people are paid a decent wage for a decent day’s work.

Productivity problems

And this chart explains why economists are worried about Britain's productivity, which has failed to rebound even though the recession is over:

Photograph: ONS

The big fear is that the British economy is slipping back, towards a situation where more people do lower paid, less productive jobs (my colleague Larry Elliott literally co-wrote the book on it: Going South)

There's another record figure in today's data, but it's not one to celebrate.

For August to October 2013, there were 1.47 million employees and self-employed people who were working part-time because they could not find a full-time job, the highest figure since records began in 1992.

The Work Foundation says there are encouraging signs in today's data, but no signs for complacency over youth unemployment.

Senior researcher Dr Benjamin Reid explains:

Today’s labour market figures are encouraging. A quarter of a million new jobs, and unemployment down almost 100,000, suggest the economy is finally in full recovery mode. It looks like improvements in the overall labour market are at last starting to trickle through and make an impact on the rate of youth unemployment, down 0.1% for the key 18-24 group.

But now is not the time to be complacent. We will need many more months of job creation before we can say that the UK's youth unemployment crisis is in full remission.

Labour: No respite in cost of living crisis

Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, has welcomed the fall in UK unemployment -- before swiftly moving onto one of Labour's key issues; that wage growth is still not matching inflation.

Reeves said:

Today’s fall in unemployment is welcome, but families are facing a cost-of-living crisis and on average working people are now £1,600 a year worse off under this out-of-touch Government.

Today’s figures show prices have now risen much faster than wages for 41 of the 42 months since David Cameron became Prime Minister. Youth unemployment is still unacceptably high at over 900,000 and the number of people in part time jobs who want to work full time has risen again, to a record high of 1.5 million.

Labour would act to tackle the high levels of youth unemployment with a compulsory jobs guarantee, funded by repeating the tax on bank bonuses, and limiting pension tax relief for the very highest earners.

This would guarantee real paid work for young people unemployed for a year and also for all adults unemployed for two years – work they would have to take or lose their benefits.

And here's the graph from the ONS that confirms that Britain's been experiencing falling real pay since 2009:

Summary

Britain’s unemployment rate has slipped to a four-and-a-half year low of 7.4%, edging closer to the “threshold” at which the Bank of England has said it will consider raising interest rates.

The Office for National Statistics (ONS) said that unemployment in the three months to October was 2.39 million, or 7.4% of the working age population, down from 7.6% in the three months to September.

Under the Bank’s policy of forward guidance, governor Mark Carney promised not to consider raising interest rates until unemployment has fallen below 7%.

When the policy was announced, the Bank’s monetary policy committee expected that to take three years; but their latest prediction is that it could be as soon as 2015.

Sterling jumped after the unemployment data was released, rising by almost a cent against the dollar, to $1.635, as investors bet on an earlier-than-expected rate rise. Bank rate-setter Martin Weale suggested last week that if unemployment is falling rapidly at the point when the 7% threshold is breached, he would regard that as a reason to tighten policy.

The details of the data suggested the jobs market has strengthened markedly over the past six months. The number of people employed across the economy has hit a fresh record high above 30 million, while there are more vacancies than at any time since the summer of 2008, before the UK slipped into recession.

On the claimant count, which measures the number of people in receipt of out-of-work benefits, the number of people unemployed fell to 1.27 million, its lowest level since January 2009.

Howard Archer, of consultancy IHS Global Insight, said:

“This is an extremely strong set of labour market data, indicating that unemployment is currently coming down rapidly in reaction to the economy’s markedly improved performance in recent months and much healthier business confidence.”

In total, 485,000 new jobs have been created over the past year.

Despite the improving conditions in the labour market, there is little evidence that the prolonged squeeze on wages is easing. The ONS said total pay rose at an annual rate of 0.9% in October, or 0.8% including bonuses. That compares with an inflation rate of 2.2% in the same month, suggesting that on average, living standards are continuing to fall.

This is an extremely strong set of labour market data, indicating that unemployment is currently coming down rapidly in reaction to the economy’s markedly improved performance in recent months and much healthier business confidence.

Markedly rising employment is supportive to hopes that that a decent rate of growth can be sustained over the coming months, although a concern remains that the squeeze on consumers’ spending power is currently only easing gradually.

That's an important point -- while real wages are shrinking, consumers remain stretched. It could take until the middle of 2014 for wage growth to finally catch up with inflation, Archer reckons.

Jeremy Cook, chief economist at the foreign exchange company, World First, was disappointed to see no real improvement in take-home pay.

The good news from the jobs market keeps on coming with the jobless rate at a 4.5 year low, according to the latest data.

Continual and strong improvements in services, manufacturing and construction sectors have been evident throughout Q3 and Q4, and the momentum that we are seeing can hopefully continue into 2014 and beyond.

Unfortunately the strength seen in jobs numbers cannot and is not being replicated in wage negotiations.

We were hoping to see that wages excluding bonuses had also increased this month, a bi-product of increased productivity and business sentiment. Unfortunately this hasn’t happened and remains at record lows…

Minister hails record high in employment

Employment minister Esther McVey has said the economy is on the "right path", following the fall in the jobless rate to a four and a half-year low.

McVey told Sky News that today's unemployment data was a good sign:

We can say today, we have hit a record high of the number of people in employment, with 30 million people in work.

She also tried to calm fears that the Bank of England might raise interest rates soon, pointing out that the 7% level set in its forward guidance is not a trigger for action (as governor Mark Carney reiterated last night)

• The number of people in employment increased by 250,000 to reach 30.09 million.• The number of unemployed people fell by 99,000 to reach 2.39 million• The number of economically inactive people aged from 16 to 64 fell by 45,000 to reach 8.92million.

At first glance, this data looks like surprisingly good news on almost every front -- unemployment has fallen sharper than expected to 7.4%, while the number of people in work climbed again in the three months to October to a new record high of over 30 million.

The government will surely claim this is another sign that the UK is recovering.

The average earnings figures shows exactly why it doesn't feel like a recovery. Average earnings rose by 1.1% in October - which is an encouraging sign -- but with inflation at 2.2% that month, it means real wages fell by 1.1%.

Merkel: Eurozone crisis not over

Over in Germany, Angela Merkel has warned that the eurozone crisis has not yet been fixed, in her first big speech to the Bundestag since being sworn in as chancellor for a third term.

Reuters reports:

German Chancellor Angela Merkel said in a speech in parliament on Wednesday that the euro zone crisis had not yet been overcome but that first signs of success were evident, especially in countries like Ireland and Spain.

Speaking a day after being sworn in for her third term, Merkel also called for European member states to commit to binding economic reform contracts, saying the founding flaws of the single currency union needed to be addressed urgently.

"Clearly the euro zone debt crisis is not yet overcome. One cannot emphasise this often enough. But we are seeing first successes and we are convinced it can be overcome permanently," she said in the Bundestag chamber.

Merkel said she did not believe the necessary changes to European structures could be implemented without changes to the EU treaty.

While we wait for the UK unemployment data (due at 9.30am), this graphic from last month shows how average weekly earnings failed to track the rising cost of living this summer, especially in the public sector (there's a larger version online here)

Bank of England decision on polymer banknotes

Also coming up this morning -- the Bank of England will announce whether it will switch Britain's bank notes from paper to plastic.

The decision comes at 10am, but as my colleague Katie Allen reports, we believe the Bank's has decided that plastic is fantastic:

The Bank of England will announce plans on Wednesday to press ahead with switching to plastic banknotes, starting with the new Sir Winston Churchill £5 note in 2016.

The decision on polymer notes will mark the beginning of the end for 320 years of paper notes from the Bank.

The move by Threadneedle Street follows Bank governor Mark Carney's native Canada, where plastic notes are being rolled out, and Australia, where they have been in circulation for more than two decades.

It was another late night session for eurozone finance ministers, and our friends in the Brussels press pack.

But it was worth it -- the politicians agreed the details of one key outstanding part of European banking union, the backstop that would be used to close down a failed bank.

The deal is a compromise, between those countries (eg Germany) that wanted banks to provide the funds, and those (eg France) who hoped to tap Europe's bailout funds.

Ministers have agreed that European banks will provide €55bn of cash for the Single Resolution Fund, over the next decade.

In the meantime, should the SRF prove inadequate, governments could impose new levies on the banks - or use public funds. If all else failed, they could tap the bailout fund - the European Stability Mechanism.

As the FT's Peter Spiegel reports, there was relief in Brussels - where finance ministers from across the EU meet today.

“We have reached a crucial breakthrough,” said Olli Rehn, the EU commissioner in charge of economic affairs, adding that it should allow finance ministers from all 28 countries to reach a final deal on Wednesday and a “peaceful Christmas.”

UK unemployment - what we expect

Today's UK jobless data (due at 9.30am) is likely to show another drop in the number of people receiving unemployment benefit, while the number of people in work will probably hit a new record high.

But there will also be gloomy news on the pay front, I fear.

Howard Archer of IHS Global Insight predicts appreciable improvement in both the claimant count and the wider ILO measure of unemployment.

He said:

Specifically, we see claimant count unemployment falling by a further 35,000 in November after a drop of 41,700 in October to be at a 58-month low of 1.2714 million.

This is seen taking the claimant count unemployment rate down to 3.8% in November from 3.9% in October.

Meanwhile, unemployment on the Labour Force Survey/International Labour Organization measure is seen falling by 47,000 in the three months to October to 2.440 million, which would be the lowest level since the three months to April 2011.

The headline unemployment rate is expected to be unchanged at 7.6%, although there is chatter that it could possibly drop to 7.5%.

But the earnings section of the report will confirm that the pay squeeze continues. Annual wage increases have been running at around 0.8% - even it that improves, it won't get close to the inflation rate of 2.1%. That means another fall in real wages.

UK economic data dominates the morning ahead of Fed decision

Good morning, and welcome to our rolling coverage of events across the world economy, the financial markets, the eurozone and the business world.

Will we be wishing ourselves a merry Dectaper tonight? After weeks of anticipation, the Federal Reserve will decide whether the US economy is strong enough for it to start slowing its stimulus programme.

The Fed is currently pumping $85bn of new money into the US economy each month in an attempt to help growth (driving stock markets to current highs), and the decision on whether to slow (or 'taper') the scheme is going to be tight.

It could also give new guidance on its thresholds for future interest rate rise, and tweak its economic forecasts.

Dectaper makes the front page of the Financial Times today.

The Federal Open Market Committee's decision comes at 7pm GMT, followed by a press conference, so traders are going to spend the day waiting nervously.

Paul Ashworth of Capital Economics reckons the Fed may well dip its toe into tapering, cutting its programme by perhaps $10bn to $75bn/month. He said:

We suspect the renewed strength of employment growth in the past few months will be just enough to persuade the Fed to begin tapering its monthly asset purchases at the two-day FOMC meeting (19.00 GMT), which ends today. It will be a close call, however.

Dear Fed: I believe I speak for all financial journalists when I say: just rip off the taper bandaid already and put us out of our misery

In the meantime, there's plenty at home and abroad to keep us occupied through the day.

What's coming up?

We get the latest UK unemployment data, at 9.30am. That will show whether Britain's labour market continues to recover, and whether there was any progress in raising wages to combat the cost of living crisis.

The minutes of the Bank of England's last meeting are also published at 9.30am.....

German investor confidence data (the IFO survey) is released this morning.

European finance ministers will be meeting in Brussels today to debate the nitty-gritty of banking union, after eurozone ministers made a breakthrough on some key details last night (more to follow).